When marginal utility is positive, but decreasing, then total utility is
A) increasing at a decreasing rate.
B) negative.
C) decreasing.
D) increasing at an increasing rate.

Question

Quizplus · Accepted Answer

When marginal utility is positive but decreasing, it means that each additional unit is providing less satisfaction than the previous one. However, the total utility is still increasing because the added units are providing some level of satisfaction. This increase in total utility, though, is happening at a decreasing rate since the marginal utility is decreasing. Therefore, the best choice is A: increasing at a decreasing rate.

When Marginal Utility Is Positive, but Decreasing, Then Total Utility